|CORAM:||C. M. Garg (JM), S. V. Mehrotra (AM)|
|CATCH WORDS:||Search assessment|
|DATE:||November 14, 2014 (Date of pronouncement)|
|DATE:||November 18, 2014 (Date of publication)|
|AY:||2003-04 to 2008-09|
|FILE:||Click here to download the file in pdf format|
|S. 153A/ 153C: Entire law on recording of satisfaction by the AO and limitation period explained|
(i) It must not be lost sight of that s. 153C of the Act and 158BD of the Act are draconian in nature when accounts of the person or entity other than the person searched are reopened automatically and revenue gets authority to assessee or reassess assessment of six assessment years preceding previous year in which seized material or evidence belonged to the person other than the person searched is handed over to the AO of that other person. Therefore, it is always advisable to the revenue authorities that the proceedings u/s 153C of the Act should not be initiated and conducted in a casual manner and the motive of statutory provision clearly stipulates that the AO should make himself satisfied prior to initiation of proceedings u/s 153C of the Act.
(ii) As per RTI reply, it has been stated and answered to the present assessee i.e. person other than person searched, the AO of the person searched has admitted that no satisfaction note is available in their record/files concerning person other than the present case. The satisfaction note clearly reveals ex facie that the same has been recorded by the AO in the capacity of AO of the person other than person searched meaning thereby assessee of the instant appeals. In these circumstances, it can safely be held that no valid satisfaction was recorded by the AO of person searched so as to fulfill requirement of valid assumption of jurisdiction u/s 153C of the Act which is sine qua non for validly assumed jurisdiction u/s 153A of the Act.
(iii) The AO recorded satisfaction and issued notice u/s 153C of the Act from AY 2003-04 to 2008-09 but on the date of recording of satisfaction i.e. 5.7.2010 the relevant previous year is 2010-11. The assessment for AY 2003-04 and AY 2004-05 is time barred as per provisions of section 153(1) of the Act which stipulated that the AO can issue the notice u/s 153A of the Act for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted and for the purpose of section 153C of the Act for the six assessment years immediately preceding the assessment year relevant to the previous year in which the document or material is handed over (DSL Properties Ltd & V.K. Fiscal Services Pvt. Ltd followed)
IT Act 1961 is not an independent Act but has to be read with other substantive laws that is vital, as every substantive Act has an independent standing unlike Income tax Act 1961.
Income tax appellate tribunals are constituted under Administrative tribunals Act 1985 which is created by virtue of a constitutional amendment, so income tax sec 255 would or cannot interfere with that Act, but when special 3 member benches are created do bot have any legal standing, as income tax Act 1961 has no control on ITATs in particular.,
CBDT can use sec 255 to make CIT(A) as a 3 member body certainly not ITAT bur CBDT attempted that means CBDT acted on a non est Act on ITAT that way arbitrary situation was created, obviously ill founded idea of CBDT or even finance ministry as parliament never conferred any such power on Finance ministry of CBDT or even PMO so governance went to ignominus situation, that way affected the credibility of ITAT, such actions would make tax payers trust to hit to rock bottom, besides taxpayers can directly move high courts/supreme court under article 226 or 32 of the constitution of india.
SIr, with due respect, ITAT is not constituted under the Administartive Tribunals Act but under the Income Tax Act.
my view is a lot of sections of income tax Act 1961 can be set aside due to misuse of the sections by officers as if india is working under some administrative law like military law that cannot work in non war state!
Definitely, such arbitrary actions would recoil on tax man sooner or later as constitutional courts could never accept such draconian tax laws on citizens by some Art 12 set up at whatever level it is.